Question

Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity (Katie Wyer, Capital) increases by $18,000. Element Direction Item Asset 1. Received cash from owner as additional investment, $18,000. Increases Increases Cash Katie Wyer, Capital Owner's Equity 2. Paid advertising expense, $4,850. Asset X 3. Purchased supplies on account, $2,100. 4. Billed customers for delivery services on account, $14,700. 5. Received cash from customers on account, $8,200.

Answer 1

Item Cash Direction Element Asset, Owner's Equity Owner's Equity, Asset Asset, |Liability Asset, Owner's Equity Asset, Asset 1. Received Cash from owner as additional Increases Katie Wyer, Capital Katie Wyer, Capital Cash investment, $18,000 Increases Decreases 2. Paid advertising expense, $4,850 Decreases Supplies Accounts Payable Accounts Receivable Katie Wyer, Capital Cash Accounts Receivable Increases 3. Purchased Supplies on account, $2,100 4. Billed Customers for delivery Services on account, $14,700. 5. Received Cash from customers on account, Increases Increases Increases Increases Decreases $8,200

Answer 2